The putdown was exquisite and, one assumes, designed to make a point. When the Metropolitan police's barrister told Lord Justice Leveson he was representing acting commissioner "Mr Tim Goodwin", the judge looked up and said, after a studied pause, "I think you'll find the name of your client is Godwin." The laconic wit contained a message: you might not be on top of your brief, but I am.

The early signs from the Leveson inquiry are good. The first year of his deliberations will stretch far and wide, covering everything from the ethics to the economics of the media. Each hearing will be conducted in the open. Whatever his eventual judgments, he wants even his potential detractors to acknowledge that this was a job thoroughly done.

A number of the key issues are clear. These include: how can you separate "proper" investigative journalism from "prurience"? When are underhand methods – secret filming, recording, impersonation, and, yes, phone hacking – justified? What are the lines of accountability when such operations are carried out?

Much of the argument will involve the twin unresolved questions of privacy and public interest. In spite of the best efforts of judges to interpret article 8 of the Human Rights Act, defining the public interest defence in these cases remains problematic. Time needs to be spent on this. The issues are often, wrongly, reduced to the rights of celebrities.

Celebrity influence

At the Liberal Democrats' conference, Hugh Grant argued that the famous had every right to determine when and how their private lives should remain private. In other words, it is private unless or until they sell their wedding photographs to Hello! magazine. To adapt that old adage: what is the difference between tax evasion and tax avoidance? Having a good accountant. What is the difference between profiting from your private life and complaining about intrusion? Having a good agent.

Politicians who have dined with Grant, beguiled by his charm, accept his utterances about journalism unquestioningly. Many – including some who have argued for libel reform – appear now to accept a "control" agenda. This starts from some powerful assumptions: that Tony Blair's description of the press as feral beasts is broadly correct; only statutory regulation, including fines and licensing, can tame these animals; and it is easy to differentiate between good journalism (broadsheet, usually liberal) and bad journalism (tabloid and mid-market, usually rabidly rightwing).

At the party conferences, delegates have queued up to denounce the media. The convoluted motion passed by the Liberal Democrats was regarded by Nick Clegg's office as excessive, and that was after they had managed to tone it down. At Labour's conference, Ed Miliband distanced himself from Ivan Lewis's suggestion of a mechanism for "striking off" journalists. At the top of the parties there appears to be a greater understanding of the need for a proportionate response.

The motives among MPs appear mixed. For some, it is revenge for the expenses scandal. For those whose phones were hacked it is understandable fury. For others, notably on the left, it is pay-back time after years of Blair/Brown fawning at the feet of the Murdoch empire. For many it is none of the above, more of an inchoate sense that something must be done.

In broad terms there is, even at this early stage, consensus on the following: those involved in the industrial-scale hacking of not just celebrities but victims of crime should be prosecuted and feel the full weight of the law. Cross-media ownership laws should be tightened considerably to prevent the concentration of power in the hands of certain moguls. The Press Complaints Commission, which failed not just on phone hacking but on the media's conduct towards the McCanns and other high-profile cases, needs radical reform.

Much of the work is likely to be focused on this area. The terms self-regulation, independent regulation and statutory have become highly charged. How, for example, do you license newspapers and not bloggers? Who is forced to abide by which rules? And how can the rules prevent governments from punishing coverage they dislike? This is much easier said than done. Remember Kate Adie's reports on the US bombing of Libya in 1986 and Norman Tebbit's response? Within a few months the BBC director general was gone. Remember Alastair's Campbell's assault on the BBC and the Hutton report? Within a few days of its publication, the director general was gone, the organisation became more pliant and relations "improved". With the right levers in place, governments can effortlessly cow journalists and their managers.

As ever in British public life, international perspectives are rare. A few close to home might be helpful. France's strict privacy laws not only protect the rich and famous from unfair intrusion; they have successfully been used on many occasions to prevent investigation into the public activities of politicians. Currently a French judge stands accused of hacking into the phones of reporters at Le Monde who were digging for information about the finances of a Nicolas Sarkozy ally. Do we want to emulate this?

Take Hungary, another EU member. Its new media law, passed in 2010, attacks a free press by imposing state control over public service broadcasters and the right to levy fines on publishers. Hungary is perhaps the most dangerous example, but there are others too. In Italy, editors are regularly dismissed for getting on the wrong side of Silvio Berlusconi.

The challenge for Leveson is to tighten procedures that help prevent wrongdoing without killing an already sickly patient. To say so is not to defend an industry or a vested interest, but to protect one of the few checks and balances against untrammelled authority.

Investigative decline

Look back over the past decade – to the road to war in Iraq, to the behaviour of bankers and more – and ask yourself, have journalists found out too much about the activities of those with power or too little? Open any newspaper and search hard for unvarnished and unspun insights. During a decade in the Westminster lobby I saw more stenography than journalism.

Hacks do the bidding of politicians, business leaders and football managers in order to preserve good access. Next time you see the word "scoop", perhaps it might be better to substitute the word "plant".

Leveson has made clear that among the many subjects he wants to look into is the economics of journalism. It is important he does. Investigative teams are expensive and in decline. Reporters rewrite press releases partly out of laziness, mainly because they have to fill papers. In short, journalism – for all the outrageous behaviour unearthed in Hackgate and other scandals – is too weak, not too strong.

The English libel laws, which Index on Censorship has been at the heart of reforming, have stopped many important investigations over the years. They are so draconian that the US Congress passed legislation protecting its citizens from our courts. It is important the UK government does not dilute its commitment to introduce the full defamation bill in 2012.

The Leveson inquiry is timely. British journalism must improve. But it is important to remember that a perfect press does not exist anywhere. One that is raucous and troublesome is better than the malleable alternative. Be careful what you wish for.